Investing is well-regarded as a very profitable way to earn income. Lots of people became wealthy by being investors or traders. In addition, the time and effort are lesser compared to starting your own business which is why many would rather invest. However, the main thing that throws off people from investing and trading in the stock exchange is its high volatility. When the profits are high, the risks are also high that one bad investment decision can make a person lose their money.
However, one must not be disheartened by the risks of trading and investing. That is because safe investments exist. These investments are low-risked and can still yield high profits. If you are looking for safe investments to start your trading career, here are our five suggestions.
Safe Investments #1 – Real Estate
Real estate is indeed one of the safe investments available to everyone. Regardless of whether it is an industrial property or for residential use only, it can provide decent and long-term income. You can have the real estate properties rented for a long-term lease or even a short-term one. Another option is to hold it for a long period and once the real estate prices rise, you can resell the property for a much higher price.
However, there is a downside to investing in real estate. The price of the real estate property will depend on the local conditions of the city or country it is in. These local conditions not only affect the price when reselling properties but also in leasing the property for the long term. Furthermore, real estate investment requires high upfront costs since you will be buying properties and be subjected to taxes. In addition, you will also have it maintained regularly and even do some annual renovations to keep it in good condition. Therefore, if you have a great sum available, this is a good safe investment for you.
Safe Investments #2 – Gold
One of the ultimate safe investments that most traders consider is gold. It may not be a good short-term investment because it is high-risked and also subjected to high volatility. Thus, if you want to have annual investment returns, gold trading is not for you. However, if you keep gold for long periods such as for decades, the returns are tremendous. That is because gold can hold its value for long periods. In the long term, this monetary asset can protect you from market inflation. Therefore, if you are looking for long-term safe investments, gold is your best bet.
Safe Investments #3 – Certificates of deposit
If you are looking for a bank investment option, certificates of deposit are safe investments that you should check out. They are time deposit accounts issued at banks that provide higher interest rates in exchange for inaccessibility. This means that the investor cannot withdraw the money until a certain period of time. The investor can choose to hold his investments from one month to 10 years. Once the period matures, he can now withdraw the amount and the interest. He also has the option to redeposit it again and lock it for another few years.
The return of investment may be low compared to high-risked stocks and foreign exchanges. However, the certificates of deposit are FDIC-insured. In the USA, the insured amount for any bank deposit is up to US$250,000. This means that if the bank closes down, you will still get the sum of money you had deposited if it is within the FDIC insurance limit. Thus, this makes certificates of deposit a nearly zero-risk investment.
Safe Investment #4 – Corporate Bonds
One of the high-yielding safe investments is corporate bonds. Corporate bonds are debts offered by large businesses to investors to generate income for their capital. To put it simply, the company borrows money from the investor and it pays him back with interest. The interest rate can be either fixed or variable depending on what the company offers.
However, not all types of corporate bonds are safe investments. Some are high-risked despite being less risky than stocks. Thus, most experts advise investors to do their research on a company before buying their bonds.
Safe Investment #5 – High-yield savings accounts
Last on the list of safe investments that any investor can start with is the high-yield savings accounts. They offer zero risks with a strong return on investments. What makes them different from the typical savings accounts provided by banks is their high-interest rates.
Banks started offering high-yield savings accounts because of the tight competition. Because of the ever-advancing internet and evolution of online technology, banks from all over the world can offer their services to anyone who has access to the Internet. To be able to stay on top of the competitive market, they will need to entice savers with high-interest rates on their saving accounts.
What is great about this is the risk is almost non-existent. That is because this bank product is also insured under the Federal Deposit Insurance Corporation. However, the interest rate is still subjective to the current market conditions. If rates fall, the return of investment with high-yielding savings accounts may not be as attractive. But nevertheless, it will not cause any losses on the investor. Thus, if you want sure earnings with zero risks, open a high-yielding savings account.
Start with safe investments
As a beginner in investing, it is best to start with safe investments despite not earning as high as those who are long-time investors. Furthermore, safe investments are not a total loss for yielding high income. Any trader can advise that the best kind of investments are those that are of high quality that will offer the best value. Even if an investment offers over 80% returns but poses a 50:50 chance of loss, then it may not be worth it.
The key to investment is earning returns with minimal risks. Those who follow this tip are the ones who succeed in investing anywhere, even in the stock market. If you want more ideas for a safe investment, check out our blog today!